Name change can't lead to claim rejection

The consumer forum recently said a company can file for a claim under its new name even though the policy stood in its former name

Shreem Capacitors was in the business of manufacturing capacitors and supplying these to various state electricity boards, government undertakings, and railways. The company obtained a 220 KVA sub-station from Maharashtra State Electricity Transmission Company (MSETCL) to erect its factory at Yavatmal. The property, including the transformer and other equipment and accessories which were kept in the open compound, was insured with United India 

Insurer (insurer).

A fire occurred on the afternoon of December 8, 2008, in which the transformer and other equipment worth Rs 52.74 lakh were burnt. The incident was reported the following day to Vadgaon Police Station in Yavatmal. 

The insurer was also intimated which appointed a surveyor. Three years later, the claim was repudiated on December 12, 2011.

Meanwhile, the company's name had changed to Shreem Electric. So the complaint was filed before the Maharashtra State Commission by the company under its new name. The insurer contested the case on the ground that the insured under the policy was Shreem Capacitors but the claimant Shreem Electric. The insurer also stated that the company had not produced the documents required by the surveyor. It alleged that a false and fabricated claim had been lodged, and justified the repudiation.

The State Commission observed that the policy was issued in the name of Shreem Capacitors, which was also the claimant. Meanwhile, on February 26, 2010, the name of the company was changed to Shreem Electric. So the Commission concluded that the company was entitled to file the complaint for claiming the amount under its new name even though the policy stood in its former name.

The Commission observed that even though initially the company had not furnished adequate proof, it had later furnished all the documents as sought by the surveyor. These had been verified and found to be in order, and it was only then that the surveyor had assessed the loss at Rs  29.48 lakh. So the Commission concluded that it was unfair on the part of the insurer to recklessly make wild allegations that false and fabricated documents had been furnished by the company.

The Commission noted that even the company was willing to accept the amount assessed by the surveyor. Accordingly, by its order of January 4, 2019, delivered by D R Shirasao for the bench along with S K Kakade, the Maharashtra State Commission ordered United India to pay Rs 29.48 lakh, along with 9 per cent interest computed from the date of the claim. In addition, the insurance company was ordered to pay Rs 1 lakh towards compensation and Rs 10,000 as litigation costs. A period of 30 days was given for compliance of the order.

The writer  is a consumer activist